Written by EGIA Contractor University’s World-Class Faculty
Service Agreements – The Lifeblood of Success
By Gary Elekes
Blood… A healthy living body cannot operate without blood. If you look carefully at the business of contracting, the service agreement acts as the "blood" in our customer retention and marketing strategy by forming deep, lasting customer relationships.
Leverage: How High-Performance Contractors Can Excel, Profit, And Make Customers Happy
By Drew Cameron
The year was 1990 in my family contractor business. The union was picketing our offices and commercial jobsites. We were ’cash-on-delivery’ with all our suppliers and manufacturers. Two builders went bankrupt and stiffed us for over $500K in receivables. The general manager made a bone-headed accounting error on work-in-progress billing that inflated sales by almost half a million dollars (fictitiously). The Yellow Pages did not print our ads in 5 of the 9 books in which advertised. My mom hit my dad with divorce papers. And, the family dog of 17 years, a little Yorkshire Terrier named Cuddles, died.
How do you pick a car for your family? Do you drive onto a lot, tell a salesperson that you need a car and let them choose one for you? Do you trust that they know how you will use the car without even talking to you? Is there an unspoken language that allows that salesperson to know how many kids you have, what sports your family participates in, how long the drive to grandma's house is and how much we want to spend? No.
Have you ever heard someone say, "Nice Guys Finish Last!"? Ever been to a funeral for a MEAN guy? Not too many people attending. I have been fascinated by the topic of leadership for over twenty years. I've read books by championship coaches in sports (Bill Belichick, Phil Jackson, Red Auerbach, John Wooden), in business (Jack Welch, Bill Gates, Steve Jobs, Alfred P. Sloan) and politics (Teddy Roosevelt, Abraham Lincoln, Ronald Reagan).
Before we cover some ways to increase technician productivity and revenue, we should go over a few key performance indicators used to judge service technician output.
Residential service technicians should produce at least $250,000 in annual sales with a 63% or higher gross profit margin. A better way to measure technician output is by annual gross profit dollars. That number is $157,500 annually or $630 gross profit dollars per average man day. Techs should run an average of four service calls per day with an average retail invoice amount of $250 each.